TIDDFACTS

Albuquerque Journal

Monday, October 06, 2008

$147M Sought by Winrock Developers

By Tamara N. Shope

Journal Staff Writer

Developers of an ambitious $650 million Winrock/Uptown project say public investment is a must before they can turn the 90-plus acres into a thriving multi-use area featuring shops, homes, entertainment, high-end offices and more.

Tonight, they will ask the City Council to approve making the area two tax increment development districts, or TIDDs, enabling developers to tap $147 million in future tax revenue to pay for infrastructure such as roads and sewers now.

Developer Gary Goodman's Winrock Partners and Hunt Uptown LLC (behind neighboring ABQ Uptown) are each asking the council to approve plans to create the TIDDs. The 83-acre Goodman property encompasses today's Winrock Center. The Hunt property is 7.5 acres adjacent to ABQ Uptown, called the Quorum.

Some critics have seen TIDDs as merely the city's subsidizing of developers' pipe dreams. Others have bemoaned the granting of TIDDs for development on the fringes of the city limits, including the Mesa del Sol and SunCal developments.

Goodman said the project has a lot of support because it's a revenue-producing infill redevelopment of an area that has become something of a ghost town in recent years. He also pledged transparency and oversight, and, ultimately, jobs and nightlife.

A TIDD allows a developer to sell bonds to cover upfront costs for infrastructure, then pay back the bonds with gross receipts and property tax revenues generated by the new development.

Developers are asking for 75 percent of the future tax revenue - the most allowed by state law - over 25 years. That would total $22.5 million for the Quorum and $124.8 million for Winrock. Developers say total cost of the infrastructure would be $150 million.

City Councilor Sally Mayer, who sponsored the bill, said she expects the council to grant formation of the districts, but she expects a battle over the percentage. When Mesa del Sol, a massive mixed-use project being built south of the airport, sought TIDD formation, it also asked for 75 percent of future taxes diverted. The council hired a consultant, who found that Mesa del Sol could do the project with 67 percent, and that's what the council gave it.

But this is different, Mayer said.

"If we go with a 50 percent increment, basically, we're cutting off a third of the whole project. You can't really support the project and not support the full increment," she said. "We are not at any risk. If the whole country tanks, we're not on the hook for anything. We are not on the hook for the bonds. We only pay the increment out of new money generated. And we get a heck of a lot of neat, progressive infrastructure out of it. It's just all good."

TIDDs require approval from the city, county and state. City approval is the first step. The developers say that if they don't get tax district designation - or if they are given a smaller tax percentage - the whole project has to be redrawn. The area could end up being a traditional shopping area instead of the posh mixed-use project in the works.

The SouthWest Organizing Project, which has objected to TIDD use in the past, says the Goodman/Hunt request isn't the "big bad monster" here. But the group is concerned that sufficient conversation take place over whether there will be enough money in the state's general fund for the more underserved areas of Albuquerque and Bernalillo County.

"Winrock is less egregious because it's an area that's already developed out. It's good for us to do infill development. It's good for us to want to focus on having a vibrant inner city core. In that way, we can't say it's a bad thing." said organization staff member Marjorie Childress.

But, "The more we slice up the pie, the question becomes, 'What do we have left over in the future for when projects for low-income development need it?' " said Childress, the organization's development coordinator.

Goodman said the development will bring 8,000 to 12,000 construction jobs to the city, beginning next year. Add in jobs created by retail, restaurant and office space, and it's an "economic stimulus package," he says.

Mayer said there hasn't been much negative feedback surrounding these TIDD requests because they are for infill development.

"This is urban renewal and development, which I think everyone thinks is an appropriate use of a TIDD," she said in a phone interview Friday.

Hunt Southwest division president Gary Sapp said attractive developments can bring in business and employers.

"It's all about attracting and retaining human capital that will follow the employer to the office," Sapp said. "What do you offer those employees so that, when they arrive, they say, 'Oh, yeah, I know what this is. This is the kind of place I lived in in Portland. This is familiar, this is expectations, this is edgy, this is urban.' "